For the following seven questions, use the following bank balance sheet. Values are millions of dollars.

-If the reserve requirement is 10%, the bank has _____ in excess reserves.
A) $0
B) $5
C) $10
D) $50

Question

For the following seven questions, use the following bank balance sheet. Values are millions of dollars.
 
-If the reserve requirement is 10%, the bank has _____ in excess reserves.
A) $0 
B) $5 
C) $10 
D) $50

Quizplus · Accepted Answer

With a 10% reserve requirement, the bank must hold 10% of its deposits as reserves. If it has $10 in excess reserves, it means it has already met its required reserve level and has an additional $10 available to lend out or invest, beyond what is required.

For the Following Seven Questions, Use the Following Bank Balance